Teck Resources' Antamina Mine Open Amid Coronavirus Measures
Zacks Investment Research | Mar 17, 2020 09:52PM ET
Teck Resources Limited (NYSE:TECK) continues to operate the Antamina mine under an exemption from the recently-announced restrictions imposed by the Peruvian Government amid the coronavirus outbreak in Peru. The Antamina mine is one of the world’s largest Zinc and Copper mines. Teck has 22.5% interest in this mine.
Although there have been no confirmed cases of COVID-19 at the mine site, Teck Resources has taken proper precautions to protect its workforce during this tough time. The company noted that it will continue to maintain its critical operations with lower workforce throughout the 15-day national quarantine period. Teck expects there will be no further negative impact of coronavirus and hence, any temporary reduction in production is anticipated to be recovered in line with the current-year guidance.
The company is a significant copper producer in the Americas, with four operating mines in Canada, Chile and Peru, and copper development projects in North and South America. Its main projects are Highland Valley Copper in Canada and Antamina, Quebrada Blanca and Carmen de Andacollo in South America. The company’s business units are focused on steelmaking coal, copper, zinc and energy.
For the current quarter, the company projects the Steelmaking Coal segment sales volumes at 4.8-5.2 million ton, down from the previous estimate of 5.1-5.4 million ton due to weather-related issues in British Colombia and rail blockades. Given the potential weak demand due to the coronavirus outbreak, and the high inventory levels due to rail and port constraints, the company plans to shut down Neptune Bulk Terminals, in order to progress the facility upgrade, which might dent quarterly coal production. In order to slow the spread of the virus, miners are shutting down its operations. Newmont Corporation (NYSE:NEM) has also halted its mining operation at Yanacocha gold mine in Peru.
Copper and zinc prices have plummeted following the outbreak of the coronavirus, while macroeconomic slowdown poses a threat to the Copper and Zinc metal markets. As China produces majority of copper, zinc, aluminum and other base metals, coronavirus fears caused copper prices to trend lower.
Teck Resources will gain from the Neptune Bulk Terminals facility upgrades, construction of Quebrada Blanca Phase 2 copper project and the company’s cost-reduction initiatives. Notably, Neptune Bulk Terminals project will significantly boost the terminal-loading capacity and improve its capability to meet delivery commitments to customers, while the Quebrada Blanca Phase 2 copper project will transform the company’s copper business, making it a major global copper producer.
The company intends to complete major plant outages in 2020. Though these outages are likely to lower steelmaking coal production in the first half of the current year, it will eventually pick up in the second half.
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